Consumer Confidence Cools After February’s 17-Year Spike


Talking Points:

Confidence Board reported that Sentiment survey came in at 127.7 easing from February’s 17-year record

Overall assessment of present and business conditions fell as consumers are slightly less optimistic

– US Dollar Index impact was limited after the sentiment surveyed

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Consumer Confidence retreated from February, according to the Conference Board. The Consumer Confidence Index came in at 127.7 this month, disappointing market expectations at 131.0. Confidence cooled this month after spiking last month to 130, the highest level since November 2000. The Present Situation Index also fell, coming in at 159.9 from 161.2 in February. Similarly, the Expectations Index fell from 109.2 last month to 106.2 this month.

The Conference Board stated that, “Consumers’ assessment of current conditions declined slightly, with business conditions the primary reason for the moderation. Consumers’ short-term expectations alsodeclined, including their outlook for the stock market, but overall expectations remain quite favorable.” The Board expects confidence to remain resilient in the months ahead.

Notably, consumers’ outlook for the job market was less positive in March. As was their optimism about the short-term outlook. Only 19.1% of respondents expected for there to be more jobs in the months ahead compared to 22.4% last month. Those expecting fewer jobs made up for 12.6% compared to 12.4% previously. Respondents expecting business conditions to improve over the next six months fell from 25% to 23%. Those expecting business conditions to worsen rose from 9.4% to 9.8%.

Overall, the sentiment for March was less optimistic. But no mention was made of recent trade disputes between global trade partners, including the US and China. Also left out was any mention of the effects of the Tax Plan. Protectionism and fiscal stimulus may not be at the top of consumers’ minds just yet even though tariffs could put upward pressure on the prices of goods. To see the full Consumer Confidence Survey click here.

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Below is a list of economic releases that has had a limited impact on the US Dollar:

USD Consumer Confidence Index (MAR): 127.7 versus 131.0 expected, from 130.8

USD Conf. Board Present Situation (MAR): 159.9 from 162.4 previous

USD Conf. Board Expectations (MAR): 106.2 from 109.7 previous

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Chart 1: DXY 15-minute Chart (March 22 – 27, 2018)

Consumer Confidence Cools After February's 17-Year Spike

Not much has of a reaction has come out of the US Dollar Index. Since yesterday, we are seeing that DXY has rebounded as markets see trade tensions easing. With the bigger theme of trade driving USD, consumer confidence has had little influence on traders’ decisions. At the time that this was written, DXY traded at 89.41.

— Written by Dylan Jusino, DailyFX Research



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